Commitments And Contingencies

The Company leases approximately 5,169 square
feet at 4643 South Ulster Street, Denver, Colorado pursuant to an amended lease dated May 21, 2015 and expiring on December 31,
2020. Under the lease, the Company pays annual base rent on an escalating scale ranging from $143,000 to $152,000. The Company
adopted ASC 842 for this lease using a modified retrospective transition approach as of the beginning of the January 2018. As a
result of the adoption, prior periods have been restated to include the recorded operating right-of use asset and operating lease
liability in the accompanying condensed consolidated balance sheets as December 31, 2018 and the decrease in operating lease liability
in the accompanying condensed consolidated statements of cash flows for the six months ended June 30, 2018.

Legal Proceedings

We are involved in certain legal proceedings
that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for
contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss
can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. A material legal proceeding
that is currently pending is as follows:

On June 18, 2018 the Company was named as a
defendant in a case filed in the United States District Court for the Southern District of New York: Securities and Exchange Commission
vs. Joseph A. Fiore, Berkshire Capital Management Co., Inc., and Eat at Joe’s, Ltd. n/k/a SPYR, Inc.(“Defendants”).
Joseph A. Fiore was the Chairman of our Board of Directors and is a significant shareholder. Mr. Fiore resigned from his positions
as Chairman of the Board and as a Director of the Company effective August 1, 2018. The suit alleges that Mr. Fiore, during 2013
and 2014, while he was the Company’s Chief Executive Officer, Chief Financial Officer and Chairman of the Board of Directors,
engaged in improper conduct on behalf of the defendants named in the case related to the Company’s sales of securities in
Plandai Biotechnology, Inc. The Commission alleges that Mr. Fiore and the Company unlawfully benefited through the sales of those
securities. The Commission also alleges that from 2013 to 2014, the Company’s primary business was investing and that it
failed to register as an investment company, resulting in an alleged violation of Section 7(a) of the Investment Company Act of
1940. The suit seeks to disgorge Joseph A. Fiore, Berkshire Capital Management Co., Inc., and the Company of alleged profits on
the sale of the securities and civil fines related to the Company’s failure to register as an investment company with the
Commission.

The Company vehemently denies any wrongdoing.
The allegations demonstrate a fundamental misunderstanding of existing precedent and a mischaracterization of the facts and transactions
at issue, which were not violative of any securities laws, rules or regulations. Based upon available information at this very
early stage of litigation, management believes that the Company will obtain a favorable ruling. Accordingly, Management believes
the likelihood of material loss resulting from this lawsuit to be remote.

On November 2, 2018, counsel for Defendants
filed a joint motion to dismiss the SEC’s suit in its entirety, primarily on the basis that the SEC’s complaint fails
to allege facts sufficient to state viable causes of action. All three defendants assert that the SEC has failed to satisfy its
heightened pleadings requirement for stating viable claims for market manipulation. All three Defendants also sought dismissal
based upon the expiration of the applicable statute of limitations and based upon the SEC’s alleged failure to file suit
within the statutory deadline for doing so as codified under the Dodd-Frank Act of 2010. This failure, Defendants argue, deprives
the SEC of jurisdiction to pursue its claims against all Defendants. In addition to the foregoing, the Company further moved for
dismissal of the alleged Section 7(a) Investment Company Act violation based upon the SEC’s failure to establish that the
Company fit the statutory definition of an Investment Company, as that term is defined under the Investment Company Act; i.e.,
the Company met one of the statutory exceptions to what is and is not an Investment Company for purposes of having to register
as such under the Act. The Company cannot accurately estimate when it expects a decision on its motion to dismiss, as it has been
fully briefed and pending for more than seven months, but expects a ruling within the next several months.

The Company is being represented by Alex Spiro,
Esq., a partner with the firm of Quinn Emmanuel, Urquhart & Sullivan, LLP and Marc S. Gottlieb, Esq., a partner with the firm
of Ortoli Rosenstadt LLP.